By F1 writer and broadcaster James Allen

The Honda story hots up

In the last hour or so I’ve read the story on the Real Honda F1 site about an imminent announcement of a management buyout and had an urgent message from one of my regular readers, saying the same thing.

Real Honda clearly have some solid sources within the team, because they have broken a fair bit of news about the team in recent years. Meanwhile I don’t know what insights Finn has but he is most specific about an imminent announcement (see his comment at the bottom of the Bernie/Honda post).

I’ve checked this afternoon with a party who would know if this were the case and apparently things are still quite finely balanced and an outcome is still a week or so away.

The gist of the urgent stories is that a management buyout deal has been done with Ross Brawn and another party and that Nick Fry is not part of the package. I have to say I’ve been hearing for some time from various sources that Nick is not part of the MBO deal that Honda wants to do, so it was interesting to see that he was mentioned in the News of the World’s ‘Honda snubs Bernie’ story yesterday.

Nick arouses mixed reviews, some really rate him, others really have it in for him and I certainly get a volley of correspondence whenever I mention his name here.
I’ve always got on well with him, but am aware that factions within Honda management in Japan feel that it is time to move on.

What is certain is that this morning in Tokyo, Honda had a press conference at which they announced that the president Takeo Fukui, a real F1 nut, is being replaced in June by Takanobu Ito, who is only 55.

Changes in presidency at Honda are always seismic events because what tends to happen is that two factions develop, one behind the new president and one behind the old and some serious politics ensue, which makes decision making prety tough sometimes. The F1 programme has definitely fallen victim to this phenomenon over the years, if you think of Harvey Postlethwaites’s Honda development car which never got raced, the decision to supply BAR, then Jordan as well and so on.

Speaking this morning, Fukui did not sound like a man who was about to announce a deal had been done either with Virgin or with the management. According to AFP he said, “The reality is that talks are proceeding with great difficulty.”

Honda has received several proposals, “but actually there are very few who are serious about buying it.”

This chimes in with what I’ve been hearing now I’m back in the UK, about Virgin, I think this could be another Northern Rock, where Virgin looks at it and gets lots of publicity but doesn’t actually do the deal. It’s no co-incidence that Virgin is celebrating its 25th anniversary and Sir Richard Branson is flying around the world to celebrate this fact and this F1 story has certainly got everyone talking about them. His appearance on Radio 4’s Today programme last week was certainly double edged, as he wanted to talk about Virgin’s 25 years and the interviewer wanted to talk F1.

This situation could still go either way; Honda has not ruled out the option of disbanding the team, but hopes to reach a deal in time for the first race on Match 29th.

Again according to AFP, the new president, Ito made the following, very interesting remark; “Racing is very challenging but also fun. Unfortunately, our company has a slight cold right now. But we would like to cure this cold as quickly as possible and work towards reaching that happiness” (of racing). In other words they would like to come back. But would they be able to?

Mercedes is on standby to provide engines and although there are stories about today being a deadline for them, that is not Mercedes’ style. I imagine they would want this deal to happen for the good of the sport and if that were not the case, or if there were a deadline they would have said so on the record, which they have not.

After all, have Honda continued R & D whilst they’ve suffered this hiatus? If so, good luck to them, it could be a viable proposition. Otherwise, the new owner(s) would inherit a team that may as well right off the entire 2009 season?

In the current climate, can ANYONE afford such a gamble? Even a global manufacturer, in this case Honda, saw it right and proper to pull the plug. Would someone like Branson, for example, turn fortunes around overnight? VERY doubtful!

They’ve got themselves to blame. Appointing a technical director who used to design bikes was always going to lead to the horrid cars that lead to the poor performances that lead to probable disbanding of the team. Sure the credit crunch ultimately forced them in to this situation but I bet they wouldn’t be in it if they were performing like they did in the latter half of 2006.

The reality in all this is that there were a series of meetings up to sub-committee level in favour of the MBO but when all is said and done there was the bigger picture to consider and greater fish to fry (no pun intended) including Fukui. Honda, being a Japanese company. is more susceptible to the whims of the men at the top and now there is a new man at the helm.

The actual decision deadline has gone back a few weeks too because Mercedes are not forcing the issue and, I understand, willing to wait another couple of weeks for a decision on engines (ie the £5m budget guarantee).
With Mercedes not forcing the issue Honda can afford to wait.

Despite what is being reported about Branson’s showboating he is serious but his offer is not all it might be and not enough to convince the Board. Wheels within wheels.

And some Honda board members are only interested in the F1 team in as far as it effects them and how Honda is perceived globally. Some sources in Japan say that the new broom (Ito) may do the opposite of the old broom just for the sake of it. Some say he will want to be shot of the issue by the time he officially takes over in June.

But he’s is not a soulless ingrate who hates F1; he helped developed their NSX supercar alongside Honda’s F1 legend Satoru Nakajima and there are s few surprises yet to come. Watch this space.

Mmm Another Ito coming, there seems to be an Ito on the board of most Japanese companies. I remember on one occasion the incoming MD as his first act, cancelling the leaving party of the outgoing chap. However such incisiveness is rare in Japanese concerns. They tend to prevaricate until there is only one course left open.

Thanks for the kind words on the site. It’s been a passion for over six years now, and it’s good to have a little recognition from time to time.

It seems as if we’ve got fundamentally similar information. I’m the first to concede that I’m not 100% confident in it this time round, but the more I dig the more I’m convinced. It just seems we’re slightly apart on timescales…

Branson’s a master of talking up buying something (Northern Rock, Concorde, etc.) without actually buying it, but there was a very serious effort put in to make something work. I assume the value to Virgin was somewhat lower than the value Honda Motor Co put on things – perhaps intentionally so – but you don’t waste the time of the calibre of people Virgin sent over just for fun.

If there’s anything you can do to fill in any of the blanks, or anything I can do the other way round, feel free to get in touch.

Real Honda is the place to be at if you need info about the team!
Congrats to Phil🙂 [ That’s the Sports Network project RealHondaF1.com. Its latest report, dated Feb 23, stated that “a management buyout of the Honda Racing F1 team had been completed, with a change in the senior staff also taking place”. — Moderator ]